Table 2 shows the estimated OASI, DI, and OASDI trust fund
ratios, on the basis of alternative II with various assumptions
about the ultimate total fertility rate. These assumptions are that the
ultimate total fertility rate will be 2.2 children per woman
(as assumed for alternative I), 1.9 (as assumed for alternative II), and 1.6
(as assumed for alternative III). The rate is assumed
to change gradually from its current level and to reach the various ultimate
values in 2020. By the end of the short-range
period, the projected fertility rates reach 2.1 children per woman
(alternative I), 2.0 (alternative II), and 1.9 (alternative III).

Table 3 shows the
estimated OASI, DI, and OASDI trust fund ratios, on the basis of alternative
II with various assumptions
about future reductions in death rates. The analysis was developed by varying
the percentage decrease assumed to occur in
future death rates. The decreases assumed for the short-range period,
summarized as changes in the age-sex-adjusted death
rate, are about 4.0 percent (as assumed for alternative I), 9.7 percent (as
assumed for alternative II), and 13.9 percent (as
assumed for alternative III). It should be noted that these reductions do not
apply uniformly to all ages. Some variation by age
was assumed consistent with the objective of selecting assumptions for
alternatives I and III that are relatively more optimistic
and more pessimistic, respectively, in terms of the long-range financing of
the OASDI program. For example, under
alternative III, death rates are lower than they are under alternative II for
people who have attained the retirement eligibility
age of 62 but are higher than under alternative II at many of the ages at
which people are usually in the labor force.

Table 4 shows the
estimated OASI, DI, and OASDI trust fund ratios, under alternative II with
various assumptions about the
magnitude of net immigration. These assumptions are that the annual net
immigration, in the year 2000 and later, will be
1,150,000 persons (as assumed for alternative I), 900,000 persons (as assumed
for alternative II), and 750,000 persons (as
assumed for alternative III). The net immigration estimates are projected to
phase into these levels from assumed 1995 levels
of 1,100,000 persons, 865,000 persons, and 700,000 persons for alternatives
I, II, and III, respectively.

The real-wage differential is the difference between the
assumed annual percentage increase in average wages in covered
employment and the assumed annual percentage increase in the Consumer Price
Index (CPI). Table 5 shows the estimated
OASI, DI, and OASDI trust fund ratios, on the basis of alternative II with
various assumptions about the real-wage
differential. These assumptions are that the ultimate real-wage differential
will be 1.5 percentage points (as assumed for
alternative I), 1.0 percentage point (as assumed for alternative II), and 0.5
percentage point (as assumed for alternative III). In
each case, the ultimate annual increase in the CPI is assumed to be 4.0
percent (as assumed for alternative II), yielding
ultimate percentage increases in average annual wages in covered employment
of 5.5, 5.0, and 4.5 percent under alternatives
I, II, and III, respectively. These ultimate levels are assumed to be reached
at the end of, or just after, the short-range period.
For each year of the short-range period, the real-wage differential is assumed
to be at the level projected, for that year, for
that alternative, in the Trustees Report, while the percentage increase in the
CPI is assumed to be at the level projected, for
that year, for alternative II.

Table 6 shows the
estimated OASI, DI, and OASDI trust fund ratios, on the basis of alternative
II with various assumptions
about the rate of increase of the Consumer Price Index. These assumptions are
that the ultimate annual increase in the CPI will
be 3.0 percent (as assumed for alternative I), 4.0 percent (as assumed for
alternative II), and 5.0 percent (as assumed for
alternative III). These ultimate levels are reached before the end of the
short-range period. In each case, the ultimate
real-wage differential is assumed to be 1.0 percentage point (as assumed
for alternative II), yielding ultimate percentage
increases in average annual wages in covered employment of 4.0, 5.0, and 6.0
percent under alternatives I, II, and III,
respectively. For each year of the short-range period, the percentage
increase in the Consumer Price Index is assumed to be
at the level projected, for that year, for that alternative, in the Trustees
Report, while the real-wage differential is assumed to
be at the level projected, for that year, for alternative II.

Table 7 shows the
estimated OASI, DI, and OASDI trust fund ratios, on the basis of alternative
II with various assumptions
about the annual nominal real interest rate for special public-debt
obligations issuable to the trust funds. These assumptions are
that the ultimate annual real interest rate will be 3.0 percent (as assumed
for alternative I), 2.3 percent (as assumed for
alternative II), and 1.5 percent (as assumed for alternative III). These
levels are reached at the end of the short-range period.
In each case, the ultimate annual increase in the CPI is assumed to be 4.0
percent (as assumed for alternative II), resulting in
ultimate annual yields of 7.1, 6.4, and 5.6 percent under alternatives I,
II, and III, respectively.

By varying only one assumption at a time, we are able to see
the relative size of the effect of changing each assumption.
Table 10
below shows the ranking, for the short-range period, of the effect
on the trust fund ratios of changing each of the
assumptions. The assumptions are ranked from 1 to 8 for OASI and DI with 1
representing the greatest effect and 8 representing the smallest effect.
Table 11
which follows shows the ranking, for both the short-range period and the
long-range period, of the effect on the OASI and DI Trust Funds, combined,
of changing each of the assumptions.

From tables 10 and
11, we can see that, of the eight categories
considered, varying the real-wage differential has the greatest
effect on the OASI and OASDI trust fund ratios and the second greatest effect
on the DI trust fund ratio during the
short-range period. Under alternative I real-wage assumptions, the OASDI trust
fund ratio for 2005 increases by 27
percentage points. Under alternative III real-wage assumptions, the OASDI
trust fund ratio for 2005 decreases by 32
percentage points. For the long-range period, varying the real-wage
differential has the second greatest effect on the
combined OASI and DI Trust Funds.